Categorization is a basic mental process that helps individuals distinguish among groups of negative and positive objects, e.g., poisons and nutrients, or predators and prey without having to learn about each individual stimulus from scratch. Both the inferior temporal cortex (ITC) and the prefrontal cortex (PFC) are thought to play important roles in the formation of perceptual categories. Monkey experiments have suggested that lateral prefrontal cortex (LPFC) participates in learning and processing visual categories. However, in humans category specific visual agnosia follows inferior temporal (IT) cortex but not LPFC damage. We have used a new behavioral approach to show that both normal monkeys and those with bilateral removal of lateral prefrontal cortex learn and generalize perceptual categories of related visual stimuli rapidly without explicit instruction, indicating that LPFC is not essential for perceptual categorization. In the past, monkeys were taught to report their perception by associating different actions with each perceptual category, e.g., look left for category A and right for category B. Because LPFC is likely to be involved in action-selection processes, it is essential to isolate cognitive requirement from executive ones (e.g., action selection) for a critical test. Here we adapt an approach from our earlier work studying incentive values in our monkeys. In our task, the monkeys (N=4) are trained to release a lever when a spot changes from red to green, a process that is completed within a few weeks. After this training, a second visual stimulus, a cue, is presented behind the spot throughout each trial. The cue indicates the incentive value of the reward delivered after a correct response to the green spot (e.g. 2 drops of juice immediately or 1 drop after 7 seconds). The monkeys prediction of the upcoming incentive value is reflected in both reaction time and error rate, where an error is either releasing the bar too early or too late. When we used two categories of visual cues (e.g., 20 dogs = high-incentive;20 cats = low-incentive), the error rates for each of the two categories quickly became significantly different, usually by the end of the first testing session. To be sure that the monkeys were not learning one category only in an A, not A, strategy, we carried out control experiments (N = 3) showing that the subject easily learned three categories. The four monkeys given bilateral removals of lateral prefrontal cortex (LPFC) showed no deficit on either performance acccuracy (error rate) or quickness of responding to the categories learned prior to the lesions, generalizing to trial unique cats or dogs, or to learning two new categories (cars vs trucks). This result led us to focus on inferior temporal cortex, area TE. Area TE of IT cortex of rhesus monkeys is considered as a late stage of visual processing in the ventral visual pathway. Monkeys with lesions of IT cortex are impaired in discriminating between pairs of patterns. Single neurons in anterior inferior temporal cortex, i.e. area TE, show marked selectivity for visual stimuli, most notably faces or complex objects. Physiological recordings (multiple single cell recordings, optical recordings, and functional MRI) suggest that there are groupings or patches for category-like stimuli, e.g. face and nonface patches in area TE. These findings lead to the inference that area TE plays a critical role in generating perceptual categories for faces or other objects. We tested three monkeys before and after bilateral removals of TE on a task in which 2 perceptual categories (i.e. dogs vs cats, human vs. monkey faces) of visual stimuli were associated with different incentive values. In the task the monkey grasped and held a bar, a visual cue from a perceptual category appeared for 400 ms, and then a red dot appeared on the cue, 500-1500 ms later the red dot changed to green. If the bar was released within 3 seconds after green appeared, the green dot changed to blue. In high incentive trials a liquid reward was also delivered. In low incentive trials the trial ended without reward. We used 20 dogs/20 cats, or 20 human/20 monkey faces for the visual cues. Before TE ablations, the monkeys made significantly more bar-release errors in trials with low incentive stimuli than in trials with high incentive stimuli (p<0.05, chi-square test);the monkeys could easily distinguish between dogs vs. cats and human vs. monkey faces. After TE removals, the monkeys continued to make significantly more errors in low incentive trials than in high incentive trials (p<0.05). To test for generalization, we used 240 trial-unique exemplars of dogs and cats (one day) and 240 exemplars of human and monkey faces (one day). The monkeys with ablations seemed unimpaired, making significantly more errors in the low incentive trials than in the high incentive trials (p<0.05). Furthermore, the monkeys with ablations quickly learned another set of categories, distinguishing cars from trucks (p<0.05). We again used 240 trial-unique exemplars during a single test session, and again generalization seemed unimpaired (p<0.05). Thus, surprisingly, it appears that area TE is not essential for retaining old perceptual categories, or learning new ones.